2015 (7) TMI 1109 - HC - VAT and Sales Tax

Suppression of sale of bricks - It was reported by the I.S.T.(Intelligence), Berhampur that during the year 2001-02 the petitioner has transported 340 trucks of bricks through the Girisola check gate, Ganjam, Berhampur. On being asked he reported that some manufacturers might have utilized his name while transporting their bricks. Held that - Only on question of law, the revision can be considered by the Court. Any question of dispute with regard to the fact unconnected with question of law, cannot be gone into by the Court. In the instant case, there is only allegation by the petitioner that some manufacturer of brick must have utilized its name while carrying the truck load of bricks to the Girisola Check Gate and the said plea has been rejected by the concerned authorities below including the Tribunal. Moreover, the plea of the petitioner that there is no sale suppression and under invoicing which are the facts in issue, have not been accepted by the Tribunal. When there is already money receipt showing the collection of amount of ₹ 3500/- per truck load of bricks but the books of accounts show sale at ₹ 1008/- per truck load of bricks, the facts decided by the Assessing Authority, First Appellate Authority and the Tribunal have been set at rest. Such questions of fact being not question of law nor being connected with any question of fact and law, can be adjudicated in this revision. - Demand confirmed - Decided against the petitioner.

Summary

Issues:
1. Challenge to finding of the Orissa Sales Tax Tribunal regarding alleged suppression of tax and enhancement of tax demand.
2. Allegations of under-invoicing and sale suppression by the petitioner.
3. Violation of natural justice in the proceedings.
4. Interpretation of Section 24(1) of the Orissa Sales Tax Act for revision by the High Court.

Analysis:
1. The petitioner challenged the Orissa Sales Tax Tribunal's finding of alleged suppression of tax and enhancement of tax demand. The petitioner, a registered dealer engaged in manufacturing and selling bricks, maintained accounts for the year 2001-2002. The assessing authority found discrepancies in the reported sale prices of bricks, leading to a demand for additional tax amounting to &8377; 3,33,950. The First Appellate Authority reduced the tax liability to &8377; 84,834, which was further increased by the Tribunal to &8377; 2,45,310. The petitioner contended that the order violated natural justice as no notice of cross-objection was provided before the tax enhancement.

2. The petitioner was accused of under-invoicing the sale price of bricks for 259 truckloads and suppressing sales for 340 truckloads. The Tribunal found discrepancies between reported and actual sale prices, resulting in the tax increase. The petitioner argued that other manufacturers might have used their name for transportation, but this defense was rejected. The Tribunal's decision to enhance the tax liability was based on the perceived under-invoicing and sale suppression by the petitioner.

3. The petitioner raised concerns about the violation of natural justice due to lack of notice regarding the tax enhancement. Citing a previous judgment, the petitioner argued that the Tribunal's failure to provide an opportunity for a hearing before increasing the tax demand rendered the order illegal. However, the Court differentiated the present case from the cited judgment, noting that a cross-appeal by the State provided notice of the tax enhancement, eliminating the alleged violation of natural justice.

4. Section 24(1) of the Orissa Sales Tax Act allows for revision by the High Court on questions of law. The Court emphasized that only legal issues could be considered in the revision, not factual disputes. The petitioner's claims of other manufacturers using their name and absence of sale suppression were factual issues rejected by the lower authorities and the Tribunal. As these were not questions of law, the Court declined to interfere with the Tribunal's findings and dismissed the revision.